Production Lead Time, Inventory Days and the VSM Timeline
The timeline (lead time ladder) is the result of value stream mapping at a glance: waiting times in inventory on top, processing times below. Their totals are the production lead time and the processing time; their ratio is the value-added ratio.
Inventory days calculator
Inventory days
Inventory is counted in pieces and converted into days using daily demand. 1,380 pieces at a demand of 920 pieces per day last 1.5 days. For the timeline, the inventory days are converted into seconds using the working time per day, so they can be compared with processing times.
Production lead time and processing time
Production lead time follows the main path of the material flow: the longest connected path from raw material to shipping. Side branches such as purchased parts count toward total inventory but not toward lead time. Processing time is the sum of the cycle times on this path.
If processing time is 2.6 minutes and production lead time is 11.3 working days of 920 minutes, a part spends 99.97% of its time waiting; the value-added ratio is 0.02%. This metric (internationally also called process cycle efficiency) is the most important number when you make the case to management. Always state the day basis: with calendar days instead of working days, the ratio drops further.
Levers to shorten lead time
- Cap inventory: supermarkets with set quantities instead of open warehouses.
- Link processes: a flow cell or FIFO lane instead of inventory between two steps.
- Reduce batch sizes: smaller batches after changeover reduction (SMED) shorten the wait per part.
- Simplify scheduling: one pacemaker process receives the schedule, everything upstream runs on pull.
Practice in the editor
In the demo, cut the "Finished goods" inventory in half and watch the timeline, lead time and value-added ratio.
Open the template in the editor Start blankFrequently asked questions
Why does purchased-parts inventory not count toward lead time?
Purchased parts join a process from the side. Production lead time measures the longest path of the main material; purchased parts add to total inventory but not to the time of the main part.
Is a lead time of 10 days bad?
That depends on the processing time. With 3 minutes of processing, 10 working days of 8 hours give a value-added ratio of 0.06%, typical for push production with weekly scheduling. After a future-state design, 1 to 3 days is realistic.